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Morgan Stanley: IMO 2020 to bring $90 oil

Oil prices could reach highs not seen since 2014 once low-sulphur fuel requirements hit the shipping industry, a Morgan Stanley report says. In addition, shipowners will see much higher costs for low-sulphur fuel as a result on a supply pinch.

Morgan Stanley analysts estimate that Brent crude oil, one of the major global benchmarks, could reach $90 per barrel by 2020.

The main reason is that global oil supplies will have to add another 5.7 million barrels per day 2020. That amount is needed in order to produce enough low-sulphur middle distillates that can be used by ships in place of high-sulphur fuel oil.

Morgan Stanley estimates that natural demand growth for middle distillates from transportation and industrial users would add 1.7 million barrels per day of demand. But the move to low-sulphur fuel will add another 1.5 million barrels per day of demand from the shipping industry.

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Morgan Stanley: IMO 2020 to bring $90 oil

Oil prices could reach highs not seen since 2014 once low-sulphur fuel requirements hit the shipping industry, a Morgan Stanley report says. In addition, shipowners will see much higher costs for low-sulphur fuel as a result on a supply pinch.

Morgan Stanley analysts estimate that Brent crude oil, one of the major global benchmarks, could reach $90 per barrel by 2020.

The main reason is that global oil supplies will have to add another 5.7 million barrels per day 2020. That amount is needed in order to produce enough low-sulphur middle distillates that can be used by ships in place of high-sulphur fuel oil.

Morgan Stanley estimates that natural demand growth for middle distillates from transportation and industrial users would add 1.7 million barrels per day of demand. But the move to low-sulphur fuel will add another 1.5 million barrels per day of demand from the shipping industry.